MUMBAI (TIP): The government on Friday raised about Rs 3,100 crore through the divestment of 10% stake in Oil India (OIL), selling about 6.01 crore shares of the state-owned oil explorer at Rs 520 per share.

The issue, which was open only for the day, generated a demand for about 15.4 crore shares, translating to an oversubscription of nearly 2.6% times. The OIL stock in the regular market closed at Rs 526, down 2.5% on the day.

Post this sale, the government’s holding in the company will fall to about 68%, a shareholding level for the company that now confirms to Sebi-mandated compulsory public holding of 25%.

The divestment in OIL also forms part of the government’s Rs 30,000 crore selloff target. The OIL divestment was also the government’s first sell-off in 2013, that last being the divestment in NMDC in December 2012. Market players said that the divestment in OIL, through the offer for sale (OFS) route, showed revival in investor interest for public offers.

The success of the OFS issue also came on the back of government’s recent decision to partially deregulate diesel prices, which in turn could bring down the subsidy burden of the oil companies like ONGC, OIL, Indian Oil and other government-run companies in the oil & gas sector. The success of the issue may now prompt the government to launch similar offers for NTPC, SAIL and MMTC